Nathan Lustig

Chilean Venture Capital Overview

Category : Chile
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Lots of entrepreneurs ask me about Chilean investors and venture capital firms. Here’s my list that I usually send them. Hopefully it’s helpful.

Private Investors

Magma Partners – We’re the only fully private investment fund in Chile. We invest early stage and like to be first investors into companies. We’ll do initial investments of $25-$75k and can follow on with up to $250,000 per company. We like two niches:  B2B businesses in Latin America and companies that have their back office in Latin America, but whose primary market is in the US or Europe. 26 investments in 2.5 years. $5m fund. Presence in Colombia, Mexico, USA.

Public-Private VCs

The Chilean government, via CORFO, offers venture capital funds incentives to invest in Chile. For every $1 funds invest, CORFO can match an additional $2 or $3 with low interest debt that they forgive if you fail, but you must repay if you’re successful. Here’s the full fund list across all industries. These are the more startup focused funds.

Nazca/Mountain – In 2015, Nazca was acquired by Mountain Partners, a successful German/Swiss VC and company builder. They generally invest $200k-$500k in companies that can scale regionally and potentially expand to other mountain offices in Europe, Asia and Africa. Nazca has offices in Argentina, Chile, Brazil, Colombia and Mexico. Mountain has offices in multiple countries across Asia, Africa and Europe.

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Doing Business and Raising Money in Latin America: My SUP Academy Talk

Category : Latin America Startups and Investing
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Last week I gave a talk at Startup Chile’s SUP Academy about doing business and raising money in Latin America. It was fun share what I’ve learned over the past five years in Chile with the next classes of startup chile entrepreneurs.

The audio quality is pretty bad, sorry about that. Hopefully it’s still listenable!

Here’s the show notes:

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Some Books, Blogs and Podcasts I’ve Enjoyed Lately

Category : Books
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Here’s some stuff I’ve been reading, watching and listening to lately.

Postcasts

This being so, so what? – Jerry Colonna

Jerry is an ex-VC and now coaches CEOs. In this episode, Jerry talks with a startup CEO who has 4 months of money left in the bank and how to make sure they keep the company around. This episode has been really useful to multiple portfolio companies already. Check out episodes 9, 20, 25 and 45 as well.

Tony Robbins on the Tim Ferriss Show

Tim interviews Tony again. They talk about health, investing and living a good life. If you’re looking for an intro to Tim Ferriss’ podcast, checkout Jamie Foxx, Arnold Schwarzenegger, Naval Ravikant, Sebastian Junger, Cal Fussman.

Kiernan Dougherty on Jocko Podcast

Jocko Willink is ex special forces and talks about war, discipline and other interesting things. Parts can be tough to listen to, especially in this episode, but this episode is extraordinary. Kiernan is a veteran war and natural disaster photographer in places like Iraq, Belfast and the indian ocean tsunami. He tells his story on this podcast.

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Investor & “Advisor” Behavior in Latin America Can Make Startups Uninvestable

Category : Latin America Startups and Investing
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One of the recurring problems we see with Latin American startups at Magma Partners is founders with too little equity. In the past two weeks, I’ve seen three cases where the full time founding team has 7%, 10% and 25% ownership after only one round of fundraising. Two companies had raised less than $100k, one had raised ~$200k. When we see companies with this structure, we tell the founders directly that it makes their company uninvestable. It’s especially true if the founders think they’ll need to raise even more money in the future, or plan to move to the United States. Every company is different, but founders should have at least ~70% at this stage, or even more if they plan to compete on the world stage.

We see five common causes:

  1. No Vesting – Cofounders who have left own significant equity
  2. “Part time cofounders” – People who aren’t full time who own significant equity
  3. “Advisors” – Companies with large numbers of “advisors” or “advisors” with significant of equity
  4. Unsophisticated investors – Raising money from people who view startup investing like investing in private equity or small businesses
  5. Investor Malice

Let’s unpack each one.

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